Leadership (Abuja)
Ozioma Ubabukoh
7 January 2009
Against the backdrop that Africa and other developing nations are not bound to be affected by the global financial crisis, former World Bank president, Mr. James Wolfensohn has stoutly dismissed such speculation, insisting that African countries would be hard hit.
Speaking in an interview, which excerpts were made available to LEADERSHIP, the international investment banker opined that African countries have only "$600 of $700 per capita income now measured against one hundred times than in the developed world," stating that, "we have the bottom end of the pyramid, people are not talking about giving up luxuries; they are talking about living in absolute poverty."
Buttressing Wolfensohn's argument, Mrs. Hauwa Hassan of the Department of Business Administration, Bayero University, Kano, noted that " the technological revolution combined with delocation and corporated restructuring has dramatically lowered the cost of production while at the same time, impoverishing millions of people. Macro- economic policies are internationalist; the same ousteristy measures are applied all over the world. Developing countries are not an exception and these policies are not in their favour."
In a paper presentation made availaable to LEADERSHIP yesterday, Hassan further emphasised that, "factories are closed down in developed countries and producrtion is transferred to third world countries where workers are often paid less than a dollar per day."
According to her, " there will be decrease in demand of raw materials from third world countries which result in cut down of supply of finished goods from developed nations that will invariably increase the prices of finished products."
She, pointed out that, third world countries such as Iran, Venezuela and Nigeria that depend 90 per cent on sale of petroleum product are likely to be worse hit by the low demand of petroleum product at international market.
Said she: "It will impact negatively on their economy. Aids and assistance that developing countries received from developed countries will now reduce because they are in financial crisis and trying to bail out their economy."
Hassan, however, advised that tough economic times require resilience, efficiency, diversity and dynamism. According to her, "these are traits that are strongly bound up with entrepreneurial spirit," appealing that " the challenge of the future is to diversify our economy and increase its internal efficiency and dynamism."
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